Shares tumble after Budget

Press, 16 June 1979, Page 9

Shares tumble after Budget

NZPA-Reuter London Trade unions have threatened disruption and stock-! market shares have fallen; sharply following Tuesday’s; radical switch in economic; policy by Britain's new Conservative Government. One Civil Service union,] the National and Local Gov-' ernment Officers’ Association, passed a motion at its annual conference voicing total opposition to Government public expenditure cuts in the Budget. Scottish miners fed fears of t damaging confrontation with trade unions by demanding a minimum $2BO a week for face workers — a rise of nearly 60 per cent. Added to higher interest rates and a Government forecast that inflation would hit an annual rate of 17.5 per cent later this year, it sent share prices sliding for the; second successive day. I After only 90 minutes ( trading, almost 52600 M had been wiped off market val-j ties. The total loss since the Budget topped $6600M. The office of the Prime Minister , (Mrs Margaret Thatcher) reported that Len Murray, general-secretary of! the Trades Union Congress, had requested a meeting to discuss union disquiet over the economic plan. On . Tuesday the Budget went further than expected! in keeping Conservative election campaign pledges to restrict Government involvement in the economy and give private enterprise freer rein.: The Chancellor of the Ex-: chequer (Sir Geoffrey Howe); cut income tax and switched!

to other forms of revenue raising — notably by putting • a big 15 per cent tax on most • goods and services. He also; (slashed public spending. The National and Local 1 Government Officers Associa-; ition decided to instruct its •730,000 members not to co-] 'operate in Government efforts to reduce local government and public service staff. The association’s secretarygeneral (Mr Geoffrey Drain) said: “We shall fight and fight] and fight until we reverse; the policies imposed upon us; this week.” He called the Budget mean and diabolical. In the shops there was continued rush to buy goods be-1 fore the new 15 per cent tax; is applied on Monday. On the! foreign-exchange -markets; sterling dropped back to! $U52.0970 after opening at] $U52.1055. But sterling was; (still above Tuesday’s level ofi (about SUS2.O7. ; Later divisions emerged •within the trade-union move-; • ment over how far it should] go in opposing the Budget. ] Joe Gormley, president of; i the National Union of Mine-I ; workers, criticised the union’s vice-president (Mr Mick McGahey), who has call- , ed for a massive campaign i to bring down the Conserva- ■ tive Government. He said the statement by Mr .McGahey, a Communist, [ I was “daft” and the N.U.M. would not use industrial . strength to fight a political . battle. If unions started, striking! Ito change Governments, it ; would “be saying we do not ;(believe in democracy,” Mr 11 Gormley added.